Kokusai Electric (6525) Q1 2027 earnings summary

Executive summary

• Achieved record quarterly revenue of JPY 75.4 billion in Q1 FY27/3, up 46% year-over-year, driven by strong equipment and service sales, especially for DRAM and logic foundry, and robust demand from non-China customers.

• Revenue and profit exceeded previous forecasts, prompting upward revisions of full-year guidance and dividend forecasts.

• Operating profit increased 63.9% year-over-year to JPY 15.9 billion; adjusted operating income rose 59% year-over-year to JPY 17.4 billion.

• Net income attributable to owners of the parent grew 70.6% year-over-year to JPY 11.6 billion.

• The semiconductor device market remains robust, with high capital investment in high-performance logic and DRAM for generative AI applications.

Financial highlights

• Q1 FY27/3 revenue: JPY 75.4 billion (+45.6% YoY, +21.6% QoQ); gross profit: JPY 30.7 billion (+38.1% YoY, +25.6% QoQ); gross margin: 40.7%.

• Adjusted operating profit: JPY 17.4 billion (+59.3% YoY, +58.4% QoQ); adjusted net income: JPY 12.5 billion (+65.1% YoY, +49.0% QoQ).

• Net income: JPY 11.6 billion (+70.6% YoY, +58.8% QoQ); net income margin: 15.3%.

• R&D expenses: JPY 4.5 billion (5.9% of revenue); capital expenditures: JPY 4.8 billion; depreciation: JPY 3.9 billion.

• Free cash flow: JPY 6.6 billion; net cash position maintained at JPY 6.6 billion.

Outlook and guidance

• Full-year FY27/3 revenue forecast raised by 21% to JPY 340 billion (+45% YoY); adjusted operating profit forecast up 42% to JPY 86 billion (+81% YoY); adjusted net income forecast up 40% to JPY 60 billion (+76% YoY).

• Dividend forecast revised to JPY 65 per share for the year.

• Non-China revenue expected to grow 49% YoY; China revenue up 37% YoY, with China share projected to trend around 30-38%.

• Equipment sales by application (FY27): NAND +49%, DRAM +61%, logic foundry +65% YoY.

• WFE market for 2026 revised up to $140 billion (+25% YoY), driven by AI-related investments.